Ed Snack

greenjacket

I am not sure you understand what ‘business sophistication’ actually means Bill. Business sophistication is essentially a measure of how many big companies you have and the networks of business. New Zealand, by global standards, only has one big global company (Fonterra) and geographical isolation and only one biggish city means networking and scale is hard.

Bill Courtney

“Really, greenjacket?

Perhaps you could have taken 2 minutes to actually read the report and review the definition of that component:

Business sophistication concerns two elements that are intricately linked: the quality of a country’s overall business networks and the quality of individual firms’ operations and strategies. These factors are especially important for countries at an advanced stage of development when, to a large extent, the more basic sources of productivity improvements have been exhausted. The quality of a country’s business networks and supporting industries, as measured by the quantity and quality of local suppliers and the extent of their interaction, is important for a variety of reasons. When companies and suppliers from a particular sector are interconnected in geographically proximate groups, called clusters, efficiency is heightened, greater opportunities for innovation in processes and products are created, and barriers to entry for new firms are reduced.”

It is NOT a measure of how many big companies a country has. Australia, which is far larger, has a ranking of 28th.